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What tax or carbon price would drive us out of our personal vehicles?

  • May 3rd, 2011

The most recent Infratil newsletter commenting on its Greenstone petrol station investment, mentioned a slight reduction in sales of premium petrol and increase in lower octane regular and diesel sales. To give context they went on::

"Over the year to the end of March 2011, the NZ$ price of crude oil rose 30%, the average retail pump price of petrol increased 22% while the price of diesel increased 46%. Government levies on petrol rose 18% and on diesel 90%".

What a lucky country we live in. In many places such price changes would cause street riots, especially if they were associated with government levies.

More interestingly, when use shifts trivially despite such huge price changes, the Greens' expectation  looks rather unreliable, that we will be weaned into public transport by by taxes and ETS price shifts. No conceivable level of tax would have alone created the price changes seen this year. Our needs and desire for the speed, convenience and security of travelling in personal bubbles is powerful indeed.

A gradual conversion to fuel efficient cars, probably electric, using upgraded road networks is the most likely future. Thankfully it will disappoint those who long for us all to sit in mass transit, heads nodding in unison as we bump over unimproved roads in congealed streams of  buses. Glorifying the idea of waiting at platforms for the next rail car, and walking nervously home from the train station will never get most of us out of cars, and it looks as if price changes too will need to be huge to have more than a gradual effect .

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